FTC and Illinois Take Action to Stop Deceptive Conduct by Company that Created Thousands of Business Listings of Fake Local Home Repair Businesses

The U.S. Department of Justice, on behalf of the Federal Trade Commission, and the state of Illinois sued Chicago-based company Premium Home Service (PHS) and its owner for fraudulently creating thousands of fake online business listings for home repair companies to deceive consumers into thinking they were choosing reputable local companies for home repairs.

The complaint also alleges that PHS and its CEO and owner Yosef Bernath posted fabricated five-star reviews that appeared to be from customers of the fake companies. PHS used these made-up five-star reviews to dilute legitimate one-star reviews from actual customers, artificially boosting the overall ratings of the listed companies.

“Premium Home Service’s use of fake business profiles and reviews violates federal and state laws, harming consumers and businesses,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The Trump-Vance FTC is committed to addressing deceptive conduct that harms the American people and undermines competition.”

Since at least 2018, Illinois-based B.E.S.T. GDR LLC, which does business as PHS, has operated around the country using scores of fabricated company names, according to the complaint.

The complaint alleges that PHS pretends to operate as an established brick-and-mortar company located near where consumers live. To market its services, PHS has created thousands of online business profiles for non-existent home-repair companies, which are typically not registered with the state. The local addresses in these profiles belong to unrelated third parties or are made up, according to the complaint.

Tens of thousands of consumers searching for local home repair service companies have been diverted to the defendants’ business profiles, which include common keywords used to search for such services, including “electrical services,” “plumbing,” “heating and cooling” and “garage door repair,” the complaint alleges. Consumers who reach the defendants’ business profiles allegedly see fabricated five-star reviews and ratings designed to encourage them to select that company for service.

According to the complaint, consumers who try to call local phone numbers for local businesses are instead routed to representatives located elsewhere, including in the Philippines. These representatives typically tell consumers a “technician” can be dispatched to their address within a particular window of time. Often, however, the representatives do not know whether any technician is available and, in many cases, no one shows up at the consumers’ homes. In other cases, PHS arranges for technicians who are not licensed or qualified to perform the job, resulting in subpar—and at times dangerous—work.

Based on this conduct, the complaint alleges that the defendants violated:

• the FTC Act by making deceptive claims about being a local home-repair business operating from a specific address, making deceptive claims about sending technicians on a specific date and time from a local business, and making deceptive claims related to fake reviews;
• the Reviews and Testimonials Rule by writing, creating, buying, or selling fake reviews and seeking and using fake reviews from employees and relatives; and
• the Gramm-Leach-Bliley Act by making false, fictitious, or fraudulent statements to obtain consumers’ financial information.

The complaint also alleges PHS violated Illinois consumer protection laws.

The Commission vote to refer the civil penalty complaint to the Department of Justice for filing was 2-0. The Department of Justice filed the complaint on behalf of the Commission in the U.S. District Court for the Northern District of Illinois. Commissioner Mark R. Meador issued a statement on this matter.

The Commission staff on this matter are William J. Hodor and Karen D. Dodge in the FTC’s Midwest Region.